Executive Summary

Q1 2025 was profitability-led: Adjusted EPS was $0.33, above S&P Global consensus of $0.27, while revenue of $493.4M declined 5% y/y and came in just below consensus of $497.9M; management reaffirmed full-year guidance and raised the quarterly dividend to $0.07 . EPS beat likely reflected mix, lower OpEx, and strong Presort margins, while revenue softness was concentrated in SendTech due to migration timing and lease-extension strategy . Estimates: EPS $0.27* vs $0.33 actual; Revenue $497.9M* vs $493.4M actual (slight miss). Values retrieved from S&P Global.
Cost actions remain a key driver: another $34M annualized costs removed in Q1, lifting the run-rate to $157M; target increased to $180–$200M annualized within ~12 months . Management reiterated FY25 outlook: Revenue $1.95–$2.00B, Adjusted EBIT $450–$480M, Adjusted EPS $1.10–$1.30, and FCF $330–$370M .
Deleveraging and capital returns: Q1 share repurchases of $15M (another $12M post-quarter) and $23M of debt repurchased (another $14M post-quarter); management expects to reach sub-3.0x leverage by Q3 2025, which would loosen covenant-based restrictions on capital returns .
Segment divergence: Presort delivered 5% revenue growth and a 36% rise in Adjusted Segment EBIT on pricing and productivity; SendTech revenue fell 9% y/y on non-recurring items and an intentional shift toward lease extensions, but segment EBIT still inched up on cost reductions .

What Went Well and What Went Wrong

What Went Well
- Presort outperformance: Revenue +5% y/y to $178M, Adjusted Segment EBIT +36% to $55M on better pricing, 3% labor productivity gains, and 3% lower unit transport costs .
- Profitability and cost discipline: Adjusted EBIT rose 28% y/y to $119.7M; adjusted EPS +74% y/y; corporate expenses -$10M y/y to $32M .
- Clear capital allocation: Dividend raised to $0.07 and ongoing buybacks; management targeting <3.0x leverage by Q3 2025; CEO emphasized deleveraging, returning “meaningful” capital, and a “hidden gem” in Global Financial Services .
What Went Wrong
- Top-line pressure: Revenue declined 5% y/y to $493.4M and modestly missed consensus ($497.9M*), driven by SendTech revenue -9% y/y (two non-recurring $4M items and lower upfront product revenue post-IMI migration) . Values retrieved from S&P Global.
- Seasonal cash use: Free cash flow was -$20.5M (excl. restructuring), reflecting prefunded postage drawdowns and timing of benefits/variable comp; GAAP CFO was -$16.7M .
- Macro/timing uncertainty: Management cited some deal timing slippage due to uncertainty (incl. federal clients), though not material; SendTech equipment sales remain in long-term decline as business pivots to lease extensions .

Financial Results

Headline metrics by quarter

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$499	$516	$493.4
GAAP EPS	($0.75)	($0.21)	$0.19
Adjusted EPS	$0.21	$0.32	$0.33
Adjusted EBIT ($M)	$103	$114	$119.7
Free Cash Flow ($M)	$75	$145	($20.5)

Q1 2025 vs estimates (S&P Global)

Metric	Consensus	Actual	Surprise
Adjusted EPS	$0.27*	$0.33	+$0.06 (beat)
Revenue ($M)	$497.9*	$493.4	-$4.5M (~-0.9%) (miss)

Values retrieved from S&P Global.

Company-level margins (calculated from cited values)

Margin	Q3 2024	Q4 2024	Q1 2025
Adjusted EBIT Margin	20.6% (103/499)	22.1% (114/516)	24.3% (119.7/493.4)

Segment breakdown (Q1 2025 vs Q1 2024)

Segment	Revenue Q1’24 ($M)	Revenue Q1’25 ($M)	Adjusted Segment EBIT Q1’24 ($M)	Adjusted Segment EBIT Q1’25 ($M)
SendTech Solutions	$327.4	$298.1	$93.7	$94.9
Presort Services	$169.8	$177.8	$40.3	$54.8

KPIs and operating levers (Q1 2025)
- Annualized cost-savings run-rate: $157M at Q1-end; +$34M added in Q1; target increased to $180–$200M .
- Bank receivables purchase program: $84M of leases held by Pitney Bowes Bank at Q1-end; evaluating expansion to ~$120M by YE25 .
- Capital returns: $15M share repurchased in Q1; +$12M post-Q1 through May 2; $23M debt repurchased in Q1; +$14M post-Q1 .
- Dividend: raised to $0.07 per share; payable June 6 to holders of record May 19 .

Guidance Changes

Metric	Period	Previous Guidance (Feb 11, 2025)	Current Guidance (May 7, 2025)	Change
Revenue	FY 2025	$1.95B – $2.00B	$1.95B – $2.00B	Maintained
Adjusted EBIT	FY 2025	$450M – $480M	$450M – $480M	Maintained
Adjusted EPS	FY 2025	$1.10 – $1.30	$1.10 – $1.30	Maintained
Free Cash Flow	FY 2025	$330M – $370M	$330M – $370M	Maintained
Leverage Ratio Target	Timing	Reduce to ~3.0x over next 24 months	Achieve ~3.0x by Q3 2025	Accelerated
Dividend per share	Ongoing	$0.06 (Q4 declared)	$0.07 (Q1 declared)	Raised

Management also reiterated that guidance already contemplates current tariff assumptions .

Earnings Call Themes & Trends

Topic	Q3 2024 (Q-2)	Q4 2024 (Q-1)	Q1 2025 (Current)	Trend
Cost reductions	Run-rate $90M; FY24 Adjusted EBIT guide raised	Run-rate ~$120M exiting 2024; target $170–$190M	+$34M in Q1; run-rate $157M; target raised to $180–$200M	Accelerating
GEC exit	Largely complete by YE; discontinued ops presented	Wind-down near completion; tax asset benefits	Exit benefits flow-through; “other ops” definition retained	De-risking
SendTech strategy	Shipping growth; migration headwinds; mix shift to SaaS	Shipping +18% in Q4; migration drag; non-recurring expense	Shift to lease extensions; shipment ex-one-time +7%; non-recurring $4M items	Stabilizing mix
Presort performance	Volumes +3%; pricing/mix lift margins	Double-digit margin expansion; pricing/productivity	Revenue +5%; EBIT +36%; productivity +3%; transport -3%	Durable strength
Capital allocation	Debt paydown intent; >$100M excess cash	$150M buyback authorization; dividend increased	Ongoing buybacks/debt repurchases; dividend to $0.07; sub-3x leverage by Q3	Increasing returns
Tariffs/macro	Not highlighted	Refi/debt extension; macro acknowledged	Tariffs not expected to be meaningful; 85% U.S. revenue; U.S. assembly	Contained risk
USPS relationship	—	—	Strong partnership; leadership engagement	Supportive
Technology/AI	—	—	New CIO; adopting AI to improve productivity	Building

Management Commentary

Strategic focus: “Continuing to execute on our strategic initiatives drove significant profitability... we remain on track to meaningfully grow cash flow and earnings over the course of 2025... continuing to cut additional costs, deleverage... and expand in profitable growth markets like shipping technology” — CEO Lance Rosenzweig .
Capital allocation and deleveraging: “We... expect to drop below our 3x leverage ratio target by Q3... which will... increase our ability to take value enhancing actions such as continuing to increase dividends and repurchasing shares” .
SendTech pivot: “Emphasizing lease extensions... enhances overall profitability and supports stable cash flow... better for the long-term health of the business, but do not have the upfront revenue associated with new equipment sales” — CFO Robert Gold .
Presort durability: “Presort has really proven... it could consistently grow... we’re very optimistic about the future of that business” — CEO .
AI adoption: “New CIO... brings an... background in AI... rolling it out to improve our productivity... across the company” — CEO .

Q&A Highlights

SendTech lease extensions vs revenue: Lease extensions improve stability of revenue and cash flows; equipment demand persists but emphasis is shifting to extensions for longer-term profitability .
USPS/macro: USPS partnership described as strong; some anecdotal deal timing delays in uncertain environments (including some federal clients), not material .
Cost program detail: Incremental savings from indirect spend, vendor/contract negotiations, insurance; cultural shift to lean operations .
Presort tuck-ins: Recent tuck-in fully integrated with quick payback; focus on small, high-ROI roll-ups; no interest in large transformative M&A .
Capital allocation and leverage: Seasonal Q1 cash uses outlined; prioritize getting below 3.0x leverage to unlock flexibility; opportunistic balance of buybacks and debt repurchases thereafter .

Estimates Context

Q1 2025 vs S&P Global consensus: Adjusted EPS $0.33 vs $0.27*, beat by $0.06; Revenue $493.4M vs $497.9M*, slight miss; profitability upside driven by Presort pricing/productivity and lower OpEx, while SendTech revenue reflected migration timing and lease mix . Values retrieved from S&P Global.
Implications: Street EPS trajectories may need upward bias for FY25 given Q1 beat and higher cost-savings target; revenue estimates likely little changed given maintained guidance and SendTech mix commentary .

Key Takeaways for Investors

Profitability > revenue this quarter: Cost discipline and Presort margin gains powered an EPS beat despite modest revenue softness; adjusted EBIT margin expanded sequentially and y/y to ~24% .
SendTech transition is deliberate: Lower upfront product revenue as leases extend and IMI migration concludes; underlying shipping growth remains intact ex one-time items .
Presort remains a compounder: Pricing, productivity and network efficiencies continue to drive double-digit EBIT growth; tuck-ins add high-ROI capacity without heavy capex .
Capital returns building: Dividend lifted to $0.07 and active repurchases underway; sub-3.0x leverage expected by Q3 should loosen constraints and support higher returns .
Full-year guide intact despite tariffs: Reaffirmed revenue, EBIT, EPS and FCF ranges; management expects tariffs to be immaterial given U.S.-centric revenue and assembly footprint .
Balance sheet and cash optimization are catalysts: Debt buybacks, refinancing, and Bank receivables program support deleveraging and cash generation through 2025 .
Watch for execution on cost and mix: Continued realization of $180–$200M cost target and SendTech shipping growth offsetting mailing declines are the key drivers of upside to EPS and FCF .

Notes:

Consensus/estimate figures marked with * are from S&P Global Capital IQ. Values retrieved from S&P Global.

Citations: Press release and 8-K exhibit (Q1 2025 results):
Earnings call transcript (Q1 2025):
Prior quarters’ press releases: Q4 2024 ; Q3 2024
Dividend press release:

PITNEY BOWES INC /DE/ (PBI)·Q1 2025 Earnings Summary